Nursing Home Cases: Qui Tam Actions

United States ex rel. Szymczak v. Covenant Healthcare Sys., 2006 U.S. App. LEXIS 32112 (7th Cir. 2006). James Szymczak brought a qui tam action against a hospital and nursing home alleging that fraudulent Medicare claims were filed and payment was received for unnecessary, unrendered, misrepresented, and unreimbursable services in violation of the False claims act (31 USC § 3729-31). Szymczak filed the action pro se and the district court dismissed the action, based on the holding in U.S. ex rel Lu v. Ou, 368 F.3d 773, 775 (7th Cir. 2004), which held that a pro se relator cannot prosecute a qui tam action. The decision was affirmed.

United States ex rel. Atkins v. McInteer, 470 F.3d 1350 (11th Cir. 2006). A physician brought a qui tam action against two other physicians and several health care providers after a nurse showed him a progress note in a nursing home chart allegedly documenting a physician’s (Lachman’s) review of the chart. The problem was that the resident had died several weeks earlier. After seeing that record, the relator began looking for other false entries Lachman might have entered. After reviewing charts for 3 months, the relator filed the qui tam action against two physicians and twelve corporations that were owners/operators of nursing homes, alleging false and fraudulent Medicare and Medicaid claims. The relator used a pleading form the Court described as “shotgun style” by incorporating paragraphs by reference, forcing the court to sift through the complaint. The Court found that the allegations of fraud failed to satisfy Rule 9(b). The complaint must include sufficient indicia of reliability to support the assertion that the defendants submitted false claims. The relator contended the district court erred by failing to grant him leave to amend his complaint. On appeal, the Court noted that the relator could have moved to alter or amend the judgment (Rule 59), or court have moved for relief from the operation of judgment (Rule 60). However, by choosing to appeal, the litigation ended, which disposed of his motion to amend. The district court did not err in dismissing the complaint without leave to amend.